Antofagasta narrows FY guidance in 'tight' copper market

Antofagasta on Wednesday narrowed full year copper production guidance to 705,000 - 725,000 tonnes as the physical market continued to look "tight" amid trade war worries.

Third quarter copper production increased 15% quarter-on-quarter to 188,300 tonnes. Production volumes will continue to grow, with the fourth quarter expected to be particularly strong, the company said. Previous annual output had been forecast at between 705,000 - 740,000 tonnes for the full year.

It added that the 2019 outlook remained positive "despite ongoing fears about disruptions to global trade" with output forecast to hit 750,000 - 790,000 tonnes, driven by higher average grades at Centinela Concentrates and Zaldívar.

Group copper production for the first nine months of the year fell 4% to 505,500 tonnes, as a result of lower grades.

Gold production during the quarter increased by 21.2% to 48,100 ounces compared to the previous quarter, but for the first nine months decreased by 30.1% to 120,100 ounces due to lower grades at Centinela, Antofagasta said.

Molybdenum production in the quarter was 4,400 tonnes, 57.1% higher quarter on quarter, and for the year to date was 10,300 tonnes, up 43.1%, due mainly to higher grades and recoveries at Los production at Centinela.

"While we benefited from higher production in the quarter, our disciplined approach to costs has allowed us to combat inflationary pressures during the year which, combined with the strong molybdenum market, has contributed to a 15% fall in our net cash costs to $1.27/lb and for the full year guidance remains unchanged at $1.35/lb,” the company said.